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Author: MartianX Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75664  
Subject: Re: HR-2374. Delays adviser fiduciary responsib Date: 11/5/2013 3:22 PM
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I am an RIA and as such am held to a fiduciary standard, as the SEC defines it (there is more than one definition).

fwiw, I know people in both industries and don't quite get how a fiduciary standard makes registered investment advisors (not RIA - prohibited) held to a higher standard. Most advisors are paid based on a percentage of assets while many brokers are paid based on either the commissions they sell or an ongoing asset management fee of some type. Neither is required to provide performance standards and/or suitable benchmarks. However, if you go into a ML Online account and Fidelity one too, you can find a IRR-ROI generator. In other words, there are ways to compute performance across both traditional brokers and non-traditional if you know where to look. But I don't think typical folks are aware of this, and in most advisor practices I've seen performance reporting is hardly standard (though in a brokerage relationship they are even rarer still).

Bottom line - I don't quite believe that assigning a 'fiduciary designation' provides one ounce of assurance that a hired gun can do the job and I don't understand why people feel like something magical will happen if the regulations are passed. It is basically up to the client to demand accountability, and the only way to do that is self-educate yourself about what you ought to expect. You can't regulate air. You can't require something and not also have a means to tell if it was enforced.

Course, there are many people who do a great job - but to suggest that an advisor isn't also a salesman isn't realistic either.
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